Microsoft Rises as One of Last Analyst Holdouts Turns Bullish

Microsoft Corp. was upgraded to buy from hold at Stifel, in what represents a vote of confidence from one of the few Wall Street’s firms that were cautious on the stock after its lagging run this year. The shares gained nearly 1% in pre-market trading.

Analyst Brad Reback raised his price target from $530 to $575, in line with the average of other analysts who track the company. It represents upside of almost 16% from Tuesday close of $498.

“We are increasingly comfortable with the company’s ability to sustain mid/upper teens revenue growth as open-weight model advancement has boosted management’s LLM agnostic strategy,” Reback wrote in a note to clients, referring to large language models. He added that the company’s “operational efficiencies are supportive of stable operating margins,” while strong cash flows “should limit the company’s need for outside financing.”

With the upgrade, skeptics on Microsoft are increasingly hard to find. Sixty-eight of the analysts who cover the stock recommend buying it, while the other three have the equivalent of hold ratings, according to data compiled by Bloomberg. No analysts recommend selling.

Yet the stock is only up about 3% this year, as of its last close, well behind the nearly 22% gain of the Nasdaq 100 Index. Outside of Tesla Inc., which has dropped 16% in 2026, Microsoft is the weakest performer among the Magnificent Seven this year, which has risen 11%.

Despite the nearly universally positive view of Microsoft from the analysts, the stock has stalled this year as investors question its heavy spending on artificial intelligence and debate the how AI will affect the business of legacy software providers.

However, Microsoft reported blowout results in late July that showed the fastest cloud-computing growth in four years, easing investor concerns about its AI strategy. The stock saw its biggest one-day jump since October 2008 in the wake of the report.

Stifel wrote that Microsoft “clearly turned the corner” with that report, allowing recent stock momentum to continue in the second half of the year.